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Bar News - October 19, 2012


NH Supreme Court At-a-Glance - September 2012

By:

Constitutional Law Ė Substantive Due Process

State v. Burton G. Hollenbeck, Jr., Docket No. 2011-165
September 5, 2012
Reversed (Hicks, J., dissenting)
  • Whether so much of RSA 632-A:2 as deems criminal a person who has provided therapy, medical treatment, or examination of another and then, when doing so is not professionally recognized as ethical or acceptable, engages in sexual penetration with the former patient within one year of the termination of the therapeutic or treating relationship, is facially unconstitutional under the due process clause of the New Hampshire or federal constitution.
The defendant psychologist was indicted for aggravated felonious sexual assault under RSA 632-A:2, I(g)(1). The indictments alleged that by engaging in sexual penetration with a former patient within one year of the end of the therapeutic relationship the defendant acted in a manner not professionally recognized as ethical. The superior court dismissed the indictments, ruling that RSA 632-A:2, I(g)(1), violates the defendantís state and federal substantive due process rights because it criminalizes private sexual conduct of consenting adults.

The Supreme Court first determined that, because the defendantís challenge to the statuteís constitutionality relied solely on the language of the indictments, which tracked nearly verbatim the statutory language, there was no meaningful distinction between his as-applied and facial challenges to the statute. The issue was therefore whether the defendant had demonstrated that no set of circumstances exists under which the challenged section of RSA 632-A:2 would be valid.

The Court next turned to the nature of the right at issue, which would determine the level of scrutiny to be applied to infringement of the right. The Court construed Lawrence v. Texas, 539 U.S. 558 (2003), to recognize a protected liberty interest for adults to engage in private, consensual sexual intimacy. Where the right recognized in Lawrence is implicated, the Court said, a standard of review intermediate between "strict scrutiny" and "rational basis" review, requiring a balancing of state and individual interests, is appropriate. Having devoted considerable attention to identifying the proper standard of review for laws infringing the right recognized in Lawrence, however, the Court held that the kind of sexual relationship with which the defendant was charged did not implicate that right. Lawrence, the Court held, recognized no constitutional protection for sexual activity involving minors, or persons who might be injured or coerced, or who are in relationships where consent might not easily be refused. RSA 632-A:2, I(g)(1), captures such activity. The relationship between a psychologist and a former patient, in particular, is the kind of relationship where consent might not easily be refused.

The defendantís challenge to the statute was therefore subject only to rational basis review. The State identified in support of RSA 632-A:2, I(g)(1), its interests in protecting the vulnerable from exploitation and in maintaining the integrity of the mental health profession; it supported the statutory one-year period during which sexual penetration is proscribed with the proposition that a former patientís susceptibility to coercion is likely to be greatest soon after treatment ends. The Court concluded on that basis that RSA 632-A:2, I(g)(1), serves or could serve legitimate government interests and is therefore not facially unconstitutional under either the New Hampshire or the federal constitution. The Court added, however, that it expressed no opinion as to the validity of any as-applied challenge to the statute that the defendant might bring later in the proceedings.

Michael A. Delaney, attorney general (Susan P. McGinnis, senior assistant attorney) for the State. Alan L. Zegas, Law Offices of Alan Zegas, Chatham, New Jersey, and Cathy J. Green, Green & Utter, Manchester, for the defendant.


Criminal

State v. Ball, Docket No. 2011-626
September 28, 2012
Affirmed
  • Whether the affidavit in support of an application for a warrant to search the defendantís home computer for child pornography set forth sufficient facts linking any such pornography to the computer.
The defendant, Jonathan Ball, was convicted of possessing child pornography. Search of his home computer pursuant to a warrant had revealed images of children engaged in sexual acts and other incriminating evidence. The defendant asserted error in denial of his motion to suppress the fruits of the search of his computer. He argued that the affidavit in support of the warrant contained insufficient facts to link any child pornography to the computer.

The affidavit recited, among other things, that a complainant had reported sexual misconduct with minors by a man named Johnston and that Johnston had displayed to the complainant digital images of female children engaged in sexual activity. Police interviews of Johnstonís minor step-daughter disclosed that he had abused her sexually, that he had taken sexually explicit photographs of her and sent them to others using his cellphone, that on more than one occasion she had engaged in sexual activity with Johnston while a man named "John" watched and masturbated, and that on one occasion "John" had touched her sexually. The step-daughter had seen a computer in "Johnís" home and had seen "John" and Johnston exchange messages by telephone.

Though the affidavit did not report that anyone had seen child pornography on the defendantís computer, the Supreme Court held that it did disclose other circumstances sufficient to support an inference that child pornography would be found there. Those circumstances were: (a) Johnstonís cellphone contained sexually explicit images of children, he used the cellphone to transmit the images to others, and he and the defendant had exchanged messages, collectively supporting an inference that Johnston had sent at least one sexually explicit image of a child to the defendantís cellphone; (b) the defendant touched the minor step-daughter and watched her and Johnston engage in sexual activity, supporting an inference that he was interested in sexual images of children; and (c) the affiantís expert opinion that people interested in sexual activity with children are likely to keep readily available sexually explicit images of children, to carry them on electronic media storage devices, and to copy such images when they receive them onto their computersí hard drives. Cases from other jurisdictions holding that evidence of child molestation does not alone establish probable cause to search for child pornography were distinguishable because, here, there was also evidence that the defendant was a voyeur of child sexual activity.

Michael A. Delaney, attorney general (Elizabeth C. Woodcock, assistant attorney general) for the State. James D. Rosenberg, Shaheen& Gordon, Concord, for the defendant.


Insurance

Great American Insurance Company v. Christy, Docket No. 2011-228
September 28, 2012
Reversed and remanded
  • Whether a legal malpractice insurer was entitled to rescission of its policy where an insured attorney, who had no actual knowledge of his partnerís misconduct and to whom upon inquiry the partner had denied any misconduct, answered "No" to the question in a renewal application, "After inquiry, is any lawyer aware of any claim, incident, act, error or omission in the last year that could result in a professional liability claim against any attorney of the Firm Ö?" and acknowledged that "The undersigned proprietor, partner, member, or officer, acting on behalf of the applicant, hereby declares after diligent inquiry that the above statements are true and that no material facts have been suppressed or misstated"?
Christy and Tessier were law partners. Beginning in 2002 Tessier engaged in a course of professional misconduct with respect to certain clients. The clients discovered the wrongdoing and in April, 2007, entered into a settlement agreement with Tessier. Tessier reneged on the agreement later that year.

The insurer GAIC issued policies of professional liability insurance to the firm of Christy & Tessier beginning in 2001 and renewed thereafter on an annual basis. Each renewal required a renewal application. In May, 2007, acting on behalf of the firm, Christy executed a renewal application in which he answered "No" to the question, "After inquiry, is any lawyer aware of any claim, incident, act, error or omission in the last year that could result in a professional liability claim against any attorney of the Firm or a predecessor firm." There was no evidence Christy knew of Tessierís misconduct when he completed the application; there was evidence that Christy asked Tessier if he had information that should be disclosed on the application and that Tessier told him there was none. GAIC issued a policy based on the application. Upon learning in 2008 of Tessierís misconduct, GAIC sued to rescind the policy or for a declaration that it had no duty to defend or indemnify Christy, the firm, or certain employees of the firm. The superior court found that Christyís answer to the question in the renewal application was false and material, and entered judgment of rescission.

Section IV.B. of the policy provided that whenever coverage would be excluded because of non-disclosure of potential claims by an insured who had committed the acts or omissions giving rise to them, "such insurance as would otherwise be afforded under this policy shall apply with respect to each and every insured who did not personally participate in committing one or more of the acts, errors or omissions" that should have been disclosed so long as the innocent insured disclosed the wrongdoing promptly after learning of it. Christy had disclosed Tessierís wrongdoing promptly after learning of it. The Supreme Court read the "innocent insured" provision in Section IV.B. to evidence the partiesí intent to distinguish actual from imputed knowledge and to spare insureds without actual knowledge of undisclosed wrongdoing from the penalty of non-coverage. Under the plain and ordinary meaning of the policy language, where a claim went unreported because one insured concealed wrongdoing from other insureds, GAIC was required to provide coverage for insureds who, because they did not participate in or have actual knowledge of the reportable wrongdoing, had no ability to report it. Knowledge of the wrongdoer himself was not to be imputed to others.

In response to GAICís argument that the question in the renewal application to which Christy answered "No" did not ask just for his personal knowledge but, instead, required an accurate response as to all insureds, the Court reasoned that it was not clear the language of Section IV.B. prohibiting imputation of knowledge to innocent insureds did not apply to the renewal application as well. In the absence of language in the renewal application itself imputing knowledge to innocent insureds of the falsity of statements made in it, the contract read as a whole Ė treating both the application and the policy as part of the contract Ė was ambiguous. Because ambiguities in insurance policies are to be construed in favor of the insured, the Court held that the renewal application did not require imputation of one insuredís knowledge to others.

Margaret H. Nelson, Sulloway & Hollis, Concord, for the plaintiff. James Q. Shirley, Sheehan Phinney Bass & Green, Manchester, for the defendants Robert Christy and Christy & Tessier, B.J. Branch and Barry M. Scotch, Backus, Meyer & Branch, Manchester, for the defendant Debra Johnson. Stephen J. Schulthess, Getman, Schulthess & Steere, Manchester, for the defendant Kathleen Tremblay. Steven M. Latici, Law Office of Steven M. Latici, Gilmanton, for the intervenor Frederick Jacobiec. Andru H. Volinsky and Edward J Sackman, Bernstein Shur, Manchester, for amicus curiae New Hampshire Association for Justice.


Professional Responsibility

Clausonís Case, No. LD-2011-010
September 18, 2012
Affirmed in part, reversed in part, vacated in part, and remanded
  • Whether there was clear and convincing evidence to support the Professional Conduct Committeeís findings that the respondent attorney failed to provide competent services in connection with a bail modification matter, jointly represented two clients when the joint representation presented a significant risk that his representation of one would be materially limited by his responsibilities to the other, and represented a client in a matter in which the clientís interests were materially adverse to those of a former client.
Todd Gray was arrested for assault after an incident of alleged domestic violence against his wife Brenda and their daughter. Brenda told the investigating officer, among other things, that Todd struck her. Todd was released under a bail order containing a no-contact provision. Brenda retained the respondent attorney to assist her in getting the no-contact order lifted; Todd also retained him for that purpose; Todd later retained him for representation in the criminal case as well. The respondent appeared with Brenda at a bail modification hearing but the district court declined to act in Toddís absence. The no-contact order was lifted after a second hearing at which Todd appeared. The criminal charges were ultimately placed on file.

The Professional Conduct Committee found the respondent violated N.H. R. Prof. Conduct 1.1 (competent representation), 1.7 (concurrent conflict of interest), 1.9(a) (successive conflict of interest) and 8.4(a).

The finding of incompetence pertained solely to the respondentís representation with respect to the no-contact order. On that subject, the Supreme Court held there was no clear and convincing evidence that the respondent, a member of the bar since 1971, was incompetent to represent the Grays in so simple a matter as a bail modification hearing even though he had little criminal law experience: the matter required no specialized knowledge or skill. The Court further held that the respondent did not violate the rules of a tribunal by failing to have Todd at the first bail modification hearing because such a hearing is not within the scope of Dist. Div. R. 2.3; that there was no clear and convincing evidence the respondent failed to conduct an adequate investigation because only modest preparation was needed in light of what was at stake and the circumstances surrounding Brendaís request for immediate relief did not lend themselves to extensive investigation; that while gross failure to investigate possible conflicts of interest might sometimes constitute incompetence the limited nature and scope of the initial representation warranted no such finding here; and that there was no clear and convincing evidence that the joint representation created a risk that Todd would violate the no-contact order by causing the respondent to communicate with Brenda on his behalf.

The respondent conceded he had not obtained informed written consent to represent clients with conflicting interests, so the Courtís analysis with respect to Rule 1.7 was limited to whether joint representation presented a significant risk that his representation of one would be materially limited by his responsibilities to the other. It was an insufficient defense on this subject that the Grays both wanted the no-contact order lifted: existing alignment of their interests did not allay the risk that their interests would later diverge. In light of evidence concerning the alleged assault, including especially Brendaís statement to the investigating officer, a disinterested lawyer might have advised her not to deny at the modification hearing that an assault took place; the possibility that she might have a change of heart and elect to testify at trial for the prosecution might have caused a disinterested lawyer to advise her not to create a record that would subject her to cross-examination at trial; but the respondentís obligations to Todd prevented him from doing either. Conversely, the respondentís obligation not to reveal without Brendaís assent confidential information he obtained in connection with his representation of her could have materially limited his ability to cross-examine her at trial, as he would have been duty bound to Todd to do. The finding of a violation of Rule 1.7 was thus adequately supported. The finding of a violation of Rule 1.9, by contrast, was not supported because there was no actual adversity between the Grays during the course of the criminal case Ė both opposed it throughout Ė and Rule 1.9, unlike Rule 1.7, is not violated by a mere risk that such adversity might develop.

James L. Kruse, Concord, for the Professional Conduct Committee; K. William Clauson, Clauson & Atwood, Concord, for the respondent.


Professional Responsibility

OíMearaís Case, Professional Conduct Committee No. LD-2011-002
September 18, 2012
Findings of violations affirmed; sanction modified
  • Whether the Professional Conduct Committee erred in recommending a three-year suspension, rather than disbarment, of an attorney who (a) made a settlement demand without his clientsí authorization, (b) permitted his personal interest in collecting a $2 million fee to interfere with his representation of his clients, and (c) testified falsely to an arbitrator that his clients had agreed to a fee in that amount.
The respondent attorney represented a catastrophically injured plaintiff and her family in a tort action arising out of a motor vehicle crash. The respondent, knowing he had no authority to do so, demanded $11 million to settle the action and the demand was accepted. When he attempted to withdraw the unauthorized demand the insurer in the tort action moved to enforce the settlement. That dispute was referred to mediation. The respondent met with his clients in advance of the mediation and they discussed modification of their 33 1/3% contingent fee agreement. The clients agreed to substitute "as negotiated" for the percentage. In a memorandum purporting to confirm the agreement, the respondent inserted a fee of $2 million in place of "as negotiated." The clients initially refused to sign. On the morning of the mediation the respondent told the clients he would not represent them at the mediation unless they agreed to at least a $2 million fee, thereby inducing them to sign the agreement he tendered to them. The tort action settled. The respondent falsely testified at a later fee arbitration that the clients had agreed to a $2 million fee.

The Supreme Court held that clear and convincing evidence supported the Professional Conduct Committeeís findings: (a) that the respondentís communication in the underlying action was a settlement demand, not a so-called Dumas demand inviting an offer, and that the respondent thereby violated N.H. R. Prof. Conduct 1.2(a) by communicating a settlement demand his clients had not authorized him to make; (b) that by threatening to sue his clients if they terminated his services, substituting the $2 million figure for "as negotiated" in the revised fee agreement, and threatening to withdraw as counsel on the morning of the mediation in order to secure a $2 million fee, the respondent permitted his personal interest in collecting a large fee materially to limit his representation of and loyalty to his clients in violation of N.H. R. Prof Conduct 1.7(a)(2); (c) that the respondent violated N.H. R. Prof. Conduct 8.4(c)(1) by testifying falsely at arbitration that his clients agreed to a $2 million fee; and (d) that by violating the foregoing rules the respondent violated N.H. R. Prof. Conduct 8.4(a).

The PCC erred, however, in concluding that suspension, rather than disbarment, was the appropriate sanction based on reasoning that the respondentís false testimony at arbitration was the most serious violation and occurred only after his representation of the clients had ended. Where there are multiple instances of misconduct the sanction imposed should be at least consistent with, and generally greater than, the sanction for the most serious of them. The respondentís violation of Rule 1.7(a)(2) was as serious a violation as his false testimony to the arbitrator. His violations were knowing ones, caused the clients to incur the expense of a lengthy fee arbitration, and caused substantial injury to the integrity of the profession. So the proper baseline sanction was disbarment. There were no significant mitigating factors and several aggravating factors. That the respondentís lies were in the context of a fee dispute rather than during the representation was, if anything, an aggravating factor because it illustrated that the lies were to further his own interests at the expense of his former clients. Disbarment, not suspension, was therefore the appropriate sanction.

Julie A. Introcaso, disciplinary counsel, on the brief, and James L. Kruse, assistant disciplinary counsel, orally, for the Professional Conduct Committee and Joshua L. Gordon, Law Office of Joshua L. Gordon, Concord, for the respondent.


Public Welfare Ė Pre-Emption

Bond v. Martineau, Docket No. 2011-819
September 28, 2012
Reversed and remanded
  • Did NHRSA 165:1-b impliedly pre-empt so much of the City of Manchesterís General Assistance Guidelines as permitted a blanket six-month suspension of the plaintiffsí benefits for failure to provide accurate financial information?
The plaintiffs, on their own behalf and as representatives of a class, sued to enjoin the City of Manchester from suspending their general assistance benefits for six months based on their misrepresentation of information to the Cityís welfare department. The Cityís Guidelines for General Assistance permit such a suspension. The superior court granted summary judgment to the City. The plaintiffs argued on appeal that applicable provisions of the Guidelines are pre-empted by RSA 165:1-b.

The relevant Guidelines provide, in substance, that misrepresentation of information is grounds for denial or termination of all City assistance for up to six months. The plaintiffsí benefits were suspended for six months based on evidence that they supplied false information about their finances; their benefits had also been briefly suspended a few weeks earlier. RSA 165:1-b provides, in substance, that a person otherwise eligible for general assistance becomes ineligible if, among other things, he or she willfully fails to provide accurate financial information; that an initial suspension is to be for seven days; that a suspension occurring within six months after an earlier one is to be for fourteen days; and that if a person fails to carry out specific actions required of him or her at the end of a seven or fourteen day suspension the suspension shall continue until the person complies.

RSA 165:1-b thus permitted the City to suspend the plaintiffsí assistance for fourteen days and indefinitely thereafter so long as they did not comply with conditions for reinstatement. The Guidelines, by contrast, permitted the City to impose a blanket six-month suspension, and it did so with respect to the plaintiffs even though, under RSA 165:1-b, they were subject only to a fourteen-day suspension if they complied with conditions of reinstatement. There was thus an actual conflict between the penalty provisions of the statute and those in the Guidelines. State law impliedly pre-empts a local law when there is an actual conflict between the two, so the Guidelines were impliedly pre-empted as applied to the plaintiffs and summary judgment for the City was improper.

The Court rejected the Cityís contention that there is no conflict between the Guidelines and RSA 165:1-b because the Guidelines govern eligibility determinations while the statute assertedly governs only suspensions: RSA 165:1-b, the Court said, on its face governs both eligibility determinations and suspensions. The Court rejected the Cityís contention that RSA 165:1-b, which applies only to those "otherwise eligible for assistance," did not apply to the plaintiffs because their misrepresentation caused them not to be eligible for assistance: the plaintiffs, the Court said, were "otherwise eligible for assistance" until the City deemed them ineligible to receive further assistance because of their misconduct. The Court likewise rejected the contention that the Guidelines merely set forth criteria for determining eligibility and are therefore consistent with the requirement in RSA 165:1 II(b) that municipalities adopt guidelines regarding that subject: as applied to the plaintiffs, the Court said, the Guidelines provided penalties for non-disclosure of financial information and were therefore pre-empted as applied.

Elliott Berry and Dan Feltes, New Hampshire Legal Assistance, Manchester and Concord, for the plaintiffs. Peter Chiesa, City Solicitorís Office of Manchester, for the defendant.


John Grunert

John Grunert has more than 30 years experience in the litigation of complex civil actions at the trial and appellate levels, largely in the New Hampshire and Massachusetts state and federal courts.

He has been a member of the New Hampshire bar since 1997 and is currently of counsel to Goganian & Associates in Needham, Mass., and can be reached at jgrunert@goganianlaw.com.


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